Over the last five years, everything from hawker food to Grab rides have gotten more expensive, and we have inflation to thank for that.
Singapore’s headline inflation has risen an average of 3.1% over the past 5 years (2020-2024), peaking to 6.13% in 2022. While it has eased in 2025, we have seen prices rise across all categories (food, services, utilities, retail, private transport, and accommodation) compared to five years ago in 2020.
As household budgets get stretched, more Singaporeans are exploring ways to earn passive income in order to supplement their paycheques and cope with surging inflation.
If you’re looking to generate extra cashflow, this article’s for you.
What is passive income?
Passive income refers to income you earn with little to no effort on your part. This is different from a side hustle where you might put in extra work and hours to start your own small business, create monetisable content, or take on freelance jobs.
Since passive income is supposed to require almost no effort, it’s usually generated from investments that make regular payments to investors.
Passive income ideas in Singapore
A dividend portfolio is a simple idea to consider for passive income. Your portfolio can hold investments such as dividend stocks, REITs, and high-yield bonds. What to invest in will be determined by your risk appetite and the yield, or amount of income, you seek. Typically, higher-yielding investments carry more risk, a dynamic known as the risk-return tradeoff.
Once you’re familiar with your risk appetite, here are three passive income strategies to consider.
Invest in Singapore REITs
Real estate investment trusts (REITs) are a way to buying a residential property for investment, and you can earn rental income from REIT properties as diverse as shopping malls, office buildings, hotels, and even hospitals without forking out millions of dollars to own those assets. Professional real estate managers will do the work of maintaining those properties while you sit back and collect dividends on a quarterly or semi-annual basis.
In Singapore, REITs are required to distribute at least 90% of their annual income to investors. This makes Singapore REITs a good source of steady passive income. For example, Syfe REIT+, a portfolio of the 20 largest REITs in Singapore, generated a LTM dividend yield of 5.40%. Offering broad exposure across key property sectors, the portfolio is professionally managed and mirrors the iEdge S-REITs leader index. It is optimised based on liquidity and market cap, with automatic reinvestment of dividends.
Read more: How to earn $1,000 in monthly passive income using Singapore REITs
Invest in dividend stocks
Dividend stocks are another popular way to earn passive income. Companies that pay attractive dividends often come from mature industries such as banks, telcos, and consumer goods. These companies usually have a stable growth outlook and a track record of paying consistent and growing dividends. Singapore bank DBS, for example, is well-known for paying sustainable dividends.
Like REITs, companies usually distribute dividends on a quarterly or semi-annual basis.
Apart from investing in dividend-paying companies, you can invest in dividend exchange-traded funds (ETFs) too if you don’t have the time or interest to research individual stocks. By holding many dividend stocks in one fund, ETFs offer both diversification and cost-efficiency.
Different dividend ETFs will have different timings for their dividend dates. You can refer to the fund’s prospectus (available online) for more detail. Invest in dividend stocks on Syfe Brokerage.
Read more: 5 ways to find the best dividend stocks
Invest in an income portfolio
Income portfolios invest primarily in fixed income assets such as government and corporate bonds, high-yield bonds, investment-grade securities, and emerging market bonds.
Compared to buying individual bonds or bond funds, an income portfolio offers more robust diversification across different assets and geographies. Emerging market bonds for example, are known to offer more attractive yields compared to bonds from developed markets.
By combining various income-generating assets in one solution, income portfolios can provide you with a diversified set of opportunities to earn passive income.
Syfe’s Income+ portfolio is a professionally managed, globally diversified bond portfolio designed to generate passive income. It offers two main options, Preserve and Enhance, to cater to different risk appetites, providing regular monthly payouts with no lock-in periods, minimum balance required, or withdrawal penalties. The portfolio is powered by actively managed funds from PIMCO and comprises SGD-hedged, investment-grade funds. It provides a distribution yield (i.e. monthly payout) of 5.0%-5.5% for Preserve and 5.5%-6.0% for Enhance, and a yield-to-maturity of 6.1%-6.4% (at the time of writing).
Earning passive income in Singapore is achievable
Making money in your sleep (i.e passive income) isn’t a pipe dream. If you’re new to income investing, here are some tips to get started.
1) Determine how much money to invest. It’s okay to start with a smaller amount and build up your passive income portfolio over time. Financial experts typically recommend setting aside 10% to 20% of your salary for investing.
2) Decide which income investments work best for you, taking into consideration your risk appetite and investment goals.
Diversification is a time-tested method of reducing investment risk. In other words, don’t put all your eggs in one basket. For example, instead of buying a single REIT, dividend stock, or bond, you can consider investing in a portfolio or ETF that holds many of those investments.
3) Choose how you want to get started. Do you want to select and manage your own investments? Or do you prefer to let experts do all the heavy lifting via a managed portfolio?
These options aren’t mutually exclusive. For example, you might use Syfe REIT+ for diversified REIT exposure and pick some dividend stocks that you’re bullish about.
And there you have it – a guide to building a passive income portfolio in Singapore. As the saying goes, the best time to invest was yesterday. With inflationary pressures likely to remain, the most important thing is to start as early as you can to reap the benefits of compound interest.
Ready to begin? Explore how you can earn passive income with Syfe today.
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